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Nomura’s McElligott: ‘It’s Getting Hot’, But ‘Perpetually Easy’ Fin Conditions ‘Keeps Train Rolling’

The proximate cause is no secret.

The proximate cause is no secret.
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4 comments on “Nomura’s McElligott: ‘It’s Getting Hot’, But ‘Perpetually Easy’ Fin Conditions ‘Keeps Train Rolling’

  1. When sentiiment and overbought gets to current levels, the risk of something “bad” happening is high and the chances of anticipating what that “bad” will be is low. It usually comes as a surprise, at least for most of us.

    Doesn’t mean that you go screaming to all cash, but taking some off the table and shifting mix/exposures makes sense.

    I’m not a fan of making big binary bets.

  2. inflation is inching up, even if it is “low” by offical measures.

  3. I tend to be suspicious when there are too many people on the same side of the boat…In this case the cause is that all the smart people have the same narrative after a long arduous study of the facts and the relevant soul search that followed…

  4. What happens if QE infinity doesn’t lead to better economic outcomes and we just keep getting higher stock prices? Corp cash flows getting hit, eventually less share shrinkage, less investment, layoffs. Then what? Fiscal stimulus? We will all be in construction. Then deposits of cash into all bank accts.

    We are growing 2% after massive fiscal stimulus and easy money. Corp profits are flat. Corp investments (future productivity and growth and wealth) is poor.

    What happens if the economy does not respond? Still think the Fed will be able to engineer higher stock prices?

    Everyone is a whore and everything is cyclical. Sorry but true.

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